What's the best accounting software for a small business?
Top Contenders
QuickBooks Online is the most widely used small business accounting software, with robust features and a large ecosystem of add-ons. It's a good fit if you need inventory, payroll, or detailed reporting, but it can be more expensive and has a learning curve.
Xero is known for its clean interface and unlimited users on most plans, making it great for collaborating with a bookkeeper or partner. FreshBooks focuses on service-based businesses and excels at invoicing and time tracking. Wave is free for basic accounting, though you'll pay for payment processing and payroll.
- QuickBooks Online: best for comprehensive features
- Xero: best for collaboration and unlimited users
- FreshBooks: best for freelancers and service businesses
- Wave: best for very small budgets
How to Decide
List your must-have features: invoicing, expense tracking, bank feeds, payroll, inventory, or project profitability. Then match those to software. Most programs offer a free trial or demo, so take advantage of that to test the workflow.
Consider your comfort with technology and whether you'll work with an accountant. Some accountants prefer specific software, so ask before you buy. Also think about growth—choosing a scalable platform now can save a painful migration later.
Common mistakes
- Choosing software based solely on price without checking if it handles your key tasks.
- Ignoring what your accountant or bookkeeper prefers to work with.
- Assuming the most popular software is automatically the best for your business.
Related questions
- How do I choose between cash basis and accrual accounting software?
- Can I do my own bookkeeping with software?
- How much does small business accounting software cost?
- What invoicing software should a freelancer or small business use?
- Is QuickBooks or Xero better for a small business?
- What is the best payroll software for a small business?